Revised Mining Charter: public hearings Day 3

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Mineral Resources and Energy

30 August 2011
Chairperson: Mr F Gona (ANC)
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Meeting Summary

The Committee continued with the public hearings on the revised Mining Charter (the Charter).Solidarity supported the revised Charter and favoured Employee Share Ownership Plans as a model for community ownership and wealth distribution. Average community share ownership should be increased to 5%. Wherever possible, Black Economic Empowerment Service Providers should be used. A National Beneficiation Agency needed to be established. The funding of and development of technical colleges to combat the mining skills shortage was urgently required, and greater emphasis was needed on the development of transferrable skills so that workers could cope with the closure of mining operations. The Mining Health and Safety Council needed to meet objectives for the Tripartite Action Plan. Committee members expressed concern that training offered by Solidarity was too brief, and asked for clarity around the role and use of Employee Share Ownership Plans. The need for refinement of beneficiation policy was raised. The Chairperson asked for an estimation of current levels of community ownership in the industry and the issue of skills saturation and transferability was discussed. Job creation was also discussed.

Congress of Allied Trade Unions (
COSATU) submitted that the mineral wealth of South Africa had been exploited with no benefit to the majority of the country and this was overdue for change. The needs of those directly impacted by the mining industry required emphasis. The mineral-dependent nature of the economy needed to be addressed with the creation of local value-adding industries. Compliance with the Charter had to be ensured. There was a need to emphasise social ownership, and local value-adding industries needed to get priority over import companies. Ethnographic consultation with communities needed to be implemented in meaningful ways. Skills development should allow for long-term security, given the finite life-span of mining operations. Provision should be made for the needs and security of foreign migrant workers. Members asked for clarity on COSATU’s concerns around Employment Equity and their opinion on different forms of community ownership. The distinction between foreign workers and South African workers was questioned. The Committee recognised that there were serious problems around implementation and compliance with Charter objects. Royalty and corporate taxes were also discussed.

The Taung Community Leadership emphasised the need for mineral wealth to be used for the eradication of poverty. This need to be done through mining community development and co-operative planning with communities. The proposed multinational mining community development fund needed to have clear objectives. The issue of mining on traditional land needed further attention. Government and industry needed to develop skills in these communities. A fund should offer loans to allow for rights acquisition and the development of skills so that communities could mine their land and manage the funds generated to ensure poverty alleviation. Traditional leaders wished to work with government to end poverty. Prospecting rights in the Taung community had been attained.

Tidimalo Minerals supported the Charter review, saying that the previous Charter had not served its purpose. Beneficiation and Black Economic Empowerment required focus in order to empower mine workers and poor mining communities. Social labour plans needed careful monitoring and there was a need also for them to focus on infrastructure development.

Royal Hlangwana House submitted that land court status and restitution concerns needed to receive more focus in the Charter. Compliance and implementation of policy required urgent attention.

Marefong Community Mining Forum expressed concern at the emergence of economic ghost towns in the wake of mine operation closures. A background on Marefong City and its economic dependence on mining was given. It was suggested that a national Mines Closure Fund should be set up for community development. Infrastructure investment was needed, as well as more focus on local skills development. Beneficiation industries should be developed in mining communities.
A Minerals Regional Development Agency for the West Rand should be established to develop strategy for the region. Strong punitive measures were needed to enforce compliance. Mining Communities would always have particular needs and this required long term planning and clarity.

The Equal Access Campaign presented a brief background on the marine mining sector and the severe lack of compliance and transformation in the sector. In every element of the Charter, all mines but one were not meeting the provisions of the Charter.
Time constraints shortened the discussion, but all Members acknowledged the neglect of the marine sector and resolved to give this more focus. The input of presenters had been valuable and needed to be taken seriously, and the Committee looked forward to engaging on the issues raised.

Meeting report

Revised Mining Charter (the Charter) : Continuation of public hearings
Solidarity submission
Mr Gideon Du Plessis, Deputy Secretary General, Solidarity, emphasised Solidarity’s strong belief that transformation was a crucial requirement for the stability of the mining industry. He then gave input on the new Charter, dealing with each of its nine elements.

Solidarity agreed with comments by the Minister of Mineral Resources that mining directors and owners should have an interest in the industry and its growth. Solidarity suggested that Employee Share Ownership Plans (ESOPs) needed stronger focus in the revised Charter. The model created real ownership, wealth and lead to employee retention. In one example, Kumba Iron Ore would pay out R500 000 to each of its 5 000 employees. Exxaro would pay out approximately R117 000 to 9 000 employees. Solidarity favoured “free shares” and “profit shares” over loan shares. A recent study showed that shareholding through ESOPs currently ranged from 0.5 to 3%. This should be increased to at least 5%. Penalties should be enforced for companies that do not comply with the ESOP model.

Solidarity suggested that Black Economic Empowerment (BEE) service providers should be used in local government wherever possible in order to encourage sustainable empowerment. Mining companies’ tenders should be clear and meet requirements in respect of recruitment of
local and retrenched mineworkers, decent employment conditions and benefits, development and learnership programmes, management mentorship programmes and joint venture partnerships that would empower people to take over businesses. Local skills transfer and development was recognised as crucial for the industry and beneficiation. Solidarity was committed to the creation of 140 000 jobs and believed this could be done through beneficiation. A national Beneficiation Agency needed to be established.

Employment Equity
Solidarity suggested that a “Mining Transformation CODESA” was required to deal with sensitive matters in order to avoid repeating debates on issues in 2014.

Human Resource Development
Solidarity believed that this was a crucial aspect, given the need for skills development in a people-driven industry. Without skilled labour the growth of the industry would be significantly hampered. One reason for the major skills shortage in the industry was that technical colleges were dysfunctional. There was a tendency to simply give out certificates without preparing workers for the full extent of their jobs. The Charter made provision for money to be deducted from payroll and to be reinvested in training. The same was done at Solidarity, with all members contributing R10 per month, and, given that Solidarity had 130 000 members, this was a useful amount to be invested in technical colleges. The skills shortage in South Africa was serious, and this was becoming an international issue. The funding and development of technical colleges required focus.

Mine Community Development
Solidarity pointed out that where mines had been closed, facilities such as schools and clinics, which were built in accordance with the Social Labour Plan, were now left disused and empty. Parts of these areas were becoming ghost towns. There needed to be greater emphasis on developing transferrable skills that would make unemployed miners employable in other industries. International investors had indicated that they would, when investing in empowerment, prefer to target the upliftment of communities, and this was therefore suggested as an area for particular focus. It could be coupled with the suggested use of BEE service providers. The motto of ‘Once empowered, Always empowered’ could be achieved through training.

Housing and Living Conditions
Solidarity noted that there was a need to change the hostel system, as overcrowding remained a major issue. Photographs illustrated the problems and the need for improvement.

Sustainable Growth and Development
There was a tension between growth and sustainability. Adequate environmental management should be an area of focus for the industry, particularly due to its impacts on job security. Health and safety was also crucial for a sustainable and profitable mining industry. The Charter indicated that a M
ining Industry Tripartite Action Plan should be used to measure achievements against objectives. Implementation of objectives was a serious issue. The Charter had an objective to promote learning in the mining industry, through development of an autonomous centre of excellence. This was to be fully operational by 2010 but had not yet been implemented. Companies would be measured against this objective, while the Mine Health and Safety Council (MHSC) still had not done their part. However other aspects had been dealt with in the MHSC, such as the improvement of occupational health and skills capacity.

Solidarity emphasised that it would be crucial to have ongoing monitoring of compliance to the Charter. Consideration should be given to making MIGDETT a statutory advisory body under the Mineral Resources and Petroleum Development Act (MRPDA). There was a need ensure that transformation did not simply create a new ‘elite’.

Mr E Marais (DA) gave his support to the suggested increase in average ESOP ownership to 5%.

Ms J Ngele (ANC) asked for clarity about the ten-month training offered by Solidarity. She pointed out that the comparable Further Education and Training College (FET) courses lasted three years, and questioned if students could reach a comparable level in ten months.

Mr E Lucas (IFP) added that when training was fast-tracked, graduates’ knowledge tended to be limited to only one aspect of an industry, making this an impermanent “quick-fix”.

Mr Du Plessis responded that the training had an intensive ten-month theory component, stretched over a year-and-a-half. Students spent the next year-and-a-half in industry, receiving practical training while earning a salary.

Mr Lucas commented that mistakes were often made in deciding upon the needs of a community without adequate consultation with the community. Schools and clinics were built without communication. When communities were included in decisions they felt a sense of ownership and involvement, and were interested in maintaining the infrastructure.

Mr H Schmidt (DA) asked why ESOPS were not more widely implemented, and what the counter arguments were against the model. It appeared to be the most direct method of beneficiation possible.

Mr Du Plessis responded that the small numbers of ESOPs established was most likely due to the fact that mines were required to give a portion of their profits away if they entered into a shared ownership model.

Mr Schmidt commented that when skilled labourers were laid off from mines, the market for their skills outside the mining industry was already often saturated. He asked how workers could be re-skilled to cope in the market outside of the industry, and how the necessary market skills were determined.

Mr Du Plessis agreed that this was a serious problem. For this reason mines were required to invest in portable-skills development. Many mines were, however, not complying with this. Solidarity tried to keep its training closely aligned with the scarce-skills list, to avoid saturation.

Mr Schmidt commented that beneficiation sounded great as a policy, but in practice it could not be done in industries where South Africa was at a competitive disadvantage. Beneficiation policy should be refined, to concentrate on those areas of industry that did have a competitive advantage.

Mr M Sonto (ANC) commented that he was not clear on whether Solidarity saw the new Mining Charter as a relevant tool or not.

Mr Du Plessis responded that Solidarity was firmly committed to the Charter and to transformation.

Mr Sonto thanked Solidarity for alerting the Committee to the bleak conditions for housing, health and safety on many mines. He asked for clarity on what the Committee should monitor in this area.

Mr Du Plessis answered that housing was dealt with in number of ways that could be seen on the scorecard.

Mr Sonto commented that transformation required that skills must be developed in those who were not skilled in the past. He commented that it was important that this was applied in the context of race. He was concerned that training white woman should not be understood as transformation.

Mr Du Plessis responded that Solidarity was firmly committed to transformation, and had a target of 40% black senior employment. At the level of miners and artisans in the industry, there were not many women, either black or white.

Mr E Mtshale (ANC) asked for clarity on the figures relating to payouts from mines to employees.

Mr Du Plessis answered that in accordance with the ESOP agreement, Exxaro mine was paying out between R100 000 and R117 000 to each of their 9 000 employees. Kumba Iron Ore would pay out approximately R500 000 to each of their 5 000 employees who were part of the ESOP scheme.

Mr Mtshale asked what percentage of the total value of the mine this represented. It could sound like a lot if the larger context was not known.

Ms F Bikani (ANC) asked if Solidarity had a relationship with the Department of Mineral Resources (DMR) and the National Qualifications Authority (NQA). She said that not enough was known about the funding of the plans. She wondered if Solidarity’s training was aligned with NQA requirements.

Mr Du Plessis answered that Solidarity did liaise with the NQA and all the different Sector Education and Training Authorities (SETAs) to ensure that it was meeting the needs of the industry. The training was SETA-accredited. Mines should be encouraged to set up their own training initiatives, as they would be well equipped to offer relevant and effective training. The Solidarity training was all membership-funded; as R10 of every member’s fee was put toward training.

The Chairperson asked what Solidarity estimated the current levels of ownership in the industry to be. The Committee had been given a particular picture by industry and the Chamber of Mines, whilst the DMR and the regulators had suggested something different.

Mr Du Plessis responded that Solidarity did not have figures on the matter, but believed that the truth lay somewhere in the middle of the two sets of figures that been presented to the Committee. An external audit on the matter would be advisable.

The Chairperson commented that Solidarity seemed to have emphasised growth and development, on the assumption that this would lead to job creation. There had, however, been a lot of jobless growth in the South African economy and this was often the same in the mining industry. Commodity prices would rise while employment levels would decline. This suggested that growth did not necessarily correlate with employment creation.

The Chairperson expressed interested in the discussion around ESOPs and appreciated the emphasis on this. He asked for further clarity on the payouts and asked whether, in the examples mentioned, these would be the first payouts under the schemes. He also asked if the amounts were based on the estimated life of the mines, or over a defined period, and said that there could be problems with a “once-off” windfall.

Mr Leigh McMaster, SHE practitioner at Solidarity, answered that ESOPs could be structured according to different models. These offered different options such as mixed shares or loan shares. The best way to spread ownership was to increase the percentage of ESOPs. The scheme was usually not set up in relation to the life of mine, but rather a defined time-period (usually five to ten years), after which the scheme would restart. The amount paid out was usually dependent on the share-price, though some were calculated on profits.

Mr Lucas commented that it was important that the employees participating in the scheme understood the process.

The Chairperson commented that there seemed to have been an emphasis on services and consumer goods in terms of procurement and little discussion of capital goods. He added that he liked the suggestions with regard to tenders in the mining industry.

Mr Du Plessis responded that Solidarity had focussed entirely on services and not capital goods.

The Chairperson asked for clarity on what Solidarity would like to see covered in another “CODESA”.

Mr Du Plessis responded that the aim would be to find a way to diffuse certain sensitivities and work together to meet the targets and objectives of the Charter.

The Chairperson asked if there were any strategies for developing alternative economies in ghost towns connected with the closure of mines.

Mr Du Plessis responded the University of Pretoria offered an entrepreneurship course, in partnership with the National Union of Mines. Mine workers were trained and given help to start their own businesses. The partnership had also put together a database of all unemployed mine workers and distributed it to all the mining companies.

The Chairperson asked for clarity on what was meant by the statement ‘Once empowered, Always empowered’.

Mr Du Plessis responded that this expressed the idea that once a person had skills s/he would always have those skills.

The Chairperson asked if new ventures would make up for the jobs lost due to the closure of the Aurora mines.

Mr Du Plessis responded that 2 500 jobs had been lost from Aurora. 2 000 new jobs were being created, if all targets were met.

The Chairperson suggested that Solidarity should give input during the future beneficiation hearings.

Congress of South African Trade Unions (COSATU) Submission
Ms Prakashnee Govender, Parliamentary Liaison Officer, COSATU, noted that the Mining Charter had only recently been amended and asked for clarity on the role of the Committee in relation to any substantive concerns that might be raised regarding the text of the new Mining Charter.

She said that, h
istorically, the mining industry had played a significant role in the growth of the economy. The country’s natural resources had been exploited, creating immense wealth for a concentrated elite few, without benefitting the majority of the country. Change was therefore long overdue. The needs of those directly affected by mining operations needed to be emphasised, and this would include needs of mining communities, labour-sending communities from which migrant workers originated, and the mineworkers themselves, whose labour had generated wealth for others.

The role of the mining sector in the economy as a whole needed to be addressed. The economy remained mineral-dependent and relied on mineral exports for foreign exchange earnings. Whilst there had supposedly been an increase in manufactured exports, these had in fact added minimal value, and sophisticated items such as machinery and equipment continued to be imported, at the expense of local job creation (see page 3 of the submission for further details). Black Economic Empowerment (BEE) needed to be viewed in this context. Transformation needed to address the racially skewed nature of the economy, and ensure equitable access to the benefits of mineral resources.

There was a need to ensure further compliance on transformation within the mining sector.

Ms Govender noted that COSATU wished to comment specifically on six aspects of the revised Charter.

COSATU noted that the original target of 15% of ownership by 2009 had not been met. The revised Charter set a requirement of 26% ownership by historically disadvantaged South Africans (HDSAs) by 2014. COSATU expressed concerns around the definition of HDSAs, but supported the principle of the de-racialisation of a key sector of the economy. There should be an emphasis on the broader elements of transformation of the sector as a whole. There was a need for social forms of ownership to give real meaning to broad-based empowerment.

COSATU suggested that the Charter’s provisions on procurement should be refined in order to promote the growth of local manufacture and content. There was a considerable problem in that BEE companies were set up as “fronts”, supplying imported goods at the expense of local suppliers. Local manufacture needed to be promoted rather that the narrow BEE. Full diversification of the economy and value chain needed to be ensured, with an emphasis on BEE empowerment for local manufacturers and industries over importers.

The Revised Charter also emphasised the term ‘Enterprise Development’ and not only ‘Procurement’. COSATU supported this amendment and would like to see emphasis given to enterprises engaged in substantial value-add, as these would have benefits for the economy as a whole. The Charter had set targets for the procurement of a minimum of 40% of capital goods and 50% of consumer goods from BEE entities by 2014. There was a need to distinguish between importing “Front” companies, and those who produced goods locally. Preference should be given in proportion to the extent that local content was demonstrated. There was a requirement for multinational suppliers of capital goods to annually contribute 0.5% of income generated toward a fund for local community development. COSATU was not opposed to this provision, but was concerned that this would not translate into a meaningful contribution toward community development. Emphasis should be placed on localisation and job creation and skills transfer specifically in communities affected by mining operations. The inevitable finite life-span of mines should be considered.

COSATU noted that the Revised Charter set a maximum threshold of 11% against HDSA ownership. This could be used to avoid accelerating local industry development and the growth of local employment. The provision should be refined to avoid liberal interpretations (see page 6 of submission for further expansion on this).

Employment Equity and Human Resource Development
COSATU supported the targets in the Revised Charter and was concerned at the lack of progress in ensuring employment equity at all levels and occupations. Access to education was crucial for employment equity. The kinds of skills that needed to be developed should take the finite life-span of mines into account, allowing for long-term security.

Mining community development
COSATU supported the provisions requiring mining companies to invest in ethnographic consultation processes and to conduct an assessment of the developmental needs of mining communities, in order to identify projects for investment. There was concern, however, over how this would be implemented in meaningful ways. COSATU suggested the need to enforce a requirement that the processes had demonstrable results. Issues such as language barriers would also present considerable challenges to the process. There should also be emphasis on the enforcement of social investment undertakings.

Migrant Labour
COSATU noted that the original Charter contained a minimal provision on migrant labour that protected foreign labourers from discrimination. The revised Charter did not mention foreign migrant labour. The hardships facing these labourers needed to be addressed, particularly in the face of rising levels of xenophobia. The needs of foreign migrant workers should be identified, including the provision of social security.

Ms Govender noted that time constraints had limited COSATU’s input and therefore these comments were not comprehensive. COSATU was available for further engagement.

Mr Sonto asked for further examples to clarify what was meant by social forms of ownership.

Mr Sonto asked for further clarity on COSATU’s concerns around employment equity and human resource development.

Ms Govender answered that across all industries, statistics were often manipulated to demonstrate Employment Equity compliance where this in fact was not present. There might be a concentration of a certain group in junior positions rather than senior positions, or concentration in “soft occupations” like Human Resource Development, whilst there was little in the “hard occupations”.

Mr Sonto asked if the question on the Committee’s role had intended to suggest that the Committee had no jurisdiction over the process of revision of the Charter.

Ms Govender responded that COSATU was not questioning whether the Committee should be enquiring into this. It appreciated that the Charter fell under the domain of the Minister. Concerns regarding the substance of the Charter had been indicated, and COSATU would like to have some engagement on these matters in the hopes of strengthening the Charter. It wished to have clarity as to whether there would be space to do this.

Mr Lucas commented that the mining industry was working toward minimum targets for 2014, but should encourage companies to go beyond these wherever possible. Targets should not be seen as restrictive.

Ms Govender agreed that targets should be seen as a starting point, not as the ideal.

Mr Lucas commented that the issue of BEE fronting was a difficult one to solve, particularly as many people did not realise they were being abused. A small amount of money could have a great value to people struggling to feed themselves, but this could lead, in the future, to people reconsidering their positions and suggesting that they had been exploited, thus threatening South Africa’s successful transition. Procurement would seem to be the easiest way to redistribute wealth, but it was difficult for small companies to compete economically with large companies, and produce items at a similar cost.

Mr Lucas commented that beneficiation was an important subject. The country had raw materials that were exported for less than their purchase price in South Africa, which then had to be bought back for a higher price as processed goods. This needed to be urgently addressed with the creation of a price advantage for local buying.

Ms N Mathibela (ANC) agreed with the input on education, set out on page 6 of the submission. She asked for further elaboration on the issue of migrant labour.

Mr Schmidt commented that there was another side to the assertion that monopolies had been created off the backs of mineworkers. This was a very broad statement, particularly given the input earlier in the meeting detailing large payouts to mine workers. It was important to acknowledge that, at times, the mining industry had run at huge losses, which were absorbed by the mining companies and not the employees. He acknowledged that at other times there were larger profits and growth, but suggested that it was necessary to adopt a balanced view.

Ms Govender responded that this was a matter of disagreement and that COSATU would maintain its position that that the concentration of wealth was far too unequal and needed to change.

Mr Schmidt commented that mining only contributed 5% of GDP and therefore could not be expected to contribute to 95% of social re-engineering. Other enterprises, as well as government, needed to do more too. 80% percent of corporate tax, in addition to a royalty tax, was paid by the mining industry. It was important to ask what benefit communities were seeing from this.

Ms Govender responded that this was not the role COSATU believed the mining industry should have in the economy, but that currently that was seen to be the case. An examination of the manufactured exports showed that these were still dominated by mineral / energy / complex exports which were in the mining sector. COSATU argued that this dominance was not sustainable in the long term and therefore there was a need to diversify. One way to do this would be to look at other industries that linked with the mining industry. She added that in the majority of countries world-wide, mineral wealth was not vested in private hands but was a national commodity. When minerals were extracted the nation needed to be compensated for that natural resource. Therefore COSATU did not consider the royalty tax to be a tax, but a form of compensation. That compensation should go toward social delivery.

The Chairperson commented that a considerable amount of tax collected went into dealing with the immense socio-economic backlog, particularly in infrastructure, facing the country. These funds were channelled into the upgrading of roads, the building of houses and many such projects. A portion of these funds was also channelled back to entities in the form of tax rebates, a controversial system in itself.

Mr Schmidt stated that in his view there should be no distinction between a foreign migrant labourer and a South African labourer. All should have the same rights. The responsibility of dealing with the social consequences of xenophobia, for instance, should not fall solely upon the mining industry.

Ms Govender responded that COSATU was not requesting a discrimination between South African and foreign workers. Equal protection was required for both and even undocumented labourers were entitled to remuneration. There were instances where provision needed to be made for foreign workers who, through circumstances, were not entitled to claim the same benefits as South African workers, such as when a worker was in the country temporarily with the intention of returning to his country of origin.

The Chairperson asked for further information on the suggestion for other forms of social ownership.

Ms Govender answered that aside from ESOPs there was the option of nationalisation. COSATU was in the process of developing a detailed response in relation to that. COSATU had resolved to re-affirm nationalisation and this should be done on a sector-by-sector basis.

The Chairperson commented that it was becoming clear that implementation was a significant problem. This would need to be addressed in the revised Charter. He assured COSATU that there would be provision for further amendments.

Submission from Taung Leadership
Mr Dikgosi Motihabane, Representative, Taung Community Leadership, said that the Taung Community welcomed the revision of the Charter, but felt that more could be done to achieve its objectives, particularly for rural communities. Taung was an area rich in minerals, particularly diamonds, yet its people were amongst the poorest in South Africa. Following the 1994 elections, there was an expectation that mineral wealth would be used to end poverty. In 2006 prospecting rights were granted to an outside company, with no consultation with the community. In 2009, five-year rights were granted. The people of Taung had received nothing from this. In August 2010 it was announced that the government had suspended the permits issued and a review process would take place. In September 2010, Taung leadership met with the DMR. In February 2011, Deputy President Kgalema Motlanthe had visited the area and promised that the Taung people would receive prospective rights. This process had now been finalised and the Taung people looked forward to the launch of their mining operations.

In many parts of South Africa rich mineral resources existed on tradition land, the home of South Africa’s poor.  Taung supported the provision for mining community development and co-operative planning with local communities. It also agreed with the requirement that multinational suppliers of capital goods to the mining industry must contribute to development. However, clarification was required on the development fund from multinationals, especially its function and management.

One issue not receiving enough attention concerned mining on traditional land. Government needed to play a developmental role in communities who were new to mining and had limited technical knowledge and experience. Traditional communities had provided workers to the mining industry for many generations, and the industry had a responsibility to these communities. Government should not keep information about resources secret from traditional leaders. Government and industry should establish a fund to provide loans and technical assistance to communities, to aid them in obtaining prospecting and mining rights, mining and skills development, and to create and manage trust funds to ensure that mining profits benefited the whole community.

He noted that in Taung, studies had been conducted on development needs, and this had led to the formation and implementation of a strategy. Profits from mining would be re-invested in the community. Many traditional leaders were prepared to work with government in the fight against poverty.

Tidimalo Minerals, Sydney on Vaal Beneficiaries submission
Mr Kabelo Bontsi, spokesperson for Tidimalo Minerals, expressed total support for the review of current Charter, stating that the previous Charter had not served its purpose. There was a need for community interviews and information sessions before prospecting rights were approved, and areas involved in land claims should no longer be mined. Historically disadvantaged people should be given the advantage in benefitting from mineral profits. The community at Sydney Vaal remained extremely poor and were excluded from the profits and benefits of mining.

He then outlined that the new Charter should serve the objectives of mineral beneficiation and BEE, in order to ensure the empowerment of mine workers and black people. Social labour plans should be monitored carefully, and should be geared towards infrastructure development.

Royal Hlangwana House submission
Mr Mamphye Jan Moima, Representative, Royal Hlangwana House, wished to emphasise two issues. The first was the issue of land court status and restitution. The restitution process was lengthy and prospecting rights would not be issued on land that would be reclaimed by a community and mined without their consent. There was no information given to the communities. While policy development was valuable, compliance urgently needed to be upheld.

Merafong Community Mining Forum submission
Mr Thabiso Monyatsi, Spokesperson, Merafong Community Mining Forum (MCMF), expressed gratitude for the opportunity to contribute to the hearings.
In Merafong, the gold mining sector and service providers to the industry accounted for more than 60% of local gross domestic product and employment. However, mineral production was an industry in decline, with mines already having closed in Marefong City, and further closures were imminent. The community feared that when the exploitable ore resources were depleted, Marefong City would become an economic ghost town. Other threats facing mining communities included health problems, acid mine drainage and skills deficits (more fully outlined on page 2 of the submission).

He noted that the
voice of these communities had largely been consigned to the periphery of the minerals policy development framework. Mineral deposits should be the wealth of all South Africans and exploitation must serve shared developmental aspirations. The persisting negative impacts of mining on local communities required targeted interventions, to avoid the emergence of socio-economic ghost towns when operations closed. The ambiguous investment targets in the previous Charter had undermined accountability. Broad-Based Black Economic Empowerment (BBBEE) had failed Merafong’s Community and benefited only a few wealthy black elites.

Mr Monyati suggested that a National Mines Closures Fund should be set up for socio-economic development in mining and labour-sending communities. Mining companies should invest in infrastructure such as schools, clinics and youth development facilities; a mandatory percentage of mineral profits should be reinvested into mining communities. Technical skills development training centres run by mines should focus on local skills development. Land should be made available by mining companies for medium and small-scale farming to ensure the development independent of mining. The people of Merafong City should be beneficiaries of the BBBEE initiatives in the next phase of the Charter implementation, and this could be done through community share schemes. 50% of the revenue from mining royalties should be used to develop mining communities. Beneficiation strategies should be implemented and value-adding industries developed in mining communities. A Minerals Regional Development Agency for the West Rand should be established, to develop a sustainable integrated development strategy for the region. There needed to be strong punitive measures enforced for non-compliance.

In closing, Mr Monyati commented that it was important to maintain a larger perspective when discussing specific details of transformation. The Community supported State ownership, which could aid beneficiation because non-export quotas could be imposed on raw materials. Whether the mines were privately owned or nationalised, mining communities would still have particular challenges and needs. For this reason long-term strategic planning was required in order to have clarity on issues. He suggested that five-year plans were not adequate.

Equal Access Campaign submission
Mr George Nicolaai, Spokesman, Equal Action Campaign (EAC), noted that to date there had been a serious lack of compliance with provisions of the Charter and a lack of action on this matter from the DMR. The EAC would provide input on behalf of the Northern Cape Small-Scale Marine Miners. Figures were presented demonstrating the economic contributions from the members of the EAC (see slides 5 and 6 of presentation). Marine Miners were the largest mining economic contributors in the area. Mr Nicolaai then gave a brief background on the Marine Diamond Mining Industry and its sectors, namely: Shallow Water, Mid Water and Deep Water (see attached presentation for full details). The input given would apply to the shallow water sector.

In respect of Ownership, EAC submitted that no shallow water mines had any community ownership, despite the provisions of the Charter. This would only be further consolidated if the sale of the Namaqualand Mines were to be approved, with Trans Hex’s shallow water holdings increasing from 35% to 62%.

In respect of Procurement and Enterprise Development, he indicated that 73% of all shallow water mines had no BEE enterprise development implemented.

In respect of Beneficiation, he noted that there was no beneficiation or branding of shallow water diamonds in local mining towns, nor any attempt to link the industry to the local tourism industry.

With regard to
Employment Equity and Human Resource Development, he noted that mine workers were employed by outsourced contractors and not mine owners. Therefore human resource development did not take place.

Only one marine mine in the Northern Cape, Alexkor, offered any form of community development. Alexkor was also the only mine that provided housing. Only Alexkor promoted sustainable development of the marine diamond resource. This was achieved by sub-dividing its concessions and offering deal splits that match economic viability. This promoted the blending of high and low grade ores and acted as an effective deterrent against high-grading.

Finally, he reported that accurate and adequate monitoring were not being done, resulting in a dismal state of transformation and collapse in the industry
. In the 1980s more than twenty diamond vessels operated out of Port Nolloth, but this had now decreased to less than five.

The Chairperson commented that time was short and that some of the presentations had given very clear recommendations.

Mr Schmidt commented that there seemed to be no alternative economic drive for the Merafong area and that the suggestions offered had been accurate. He questioned the validity of the conclusions drawn by the EAC.

Mr Nicolaai’s response was cut short, due to time constraints.

Ms Bikani commented that the Committee needed to have further debate on the issues raised and how to approach them. An action plan would be required. There tended to be a focus on inland mining at the expense of coastal mining. It seemed that these mine workers were not getting the attention they needed and that the Committee should focus on this issue the revised Charter. She added that the Committee should visit a marine mine.

Mr Mtshale thanked the presenters and asserted that the Committee needed to take these issues seriously.

The Chairperson thanked the presenters for their input and commented that while time had been short for discussion, it was important that the Committee had heard all the submissions. The Committee looked forward to the commencement of mining at Taung.

The meeting was adjourned.

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